Zara sales continue to expand as consumers keep buying
Inditex, the Spanish fashion brand that owns Zara, today reported robust sales growth in its latest financial period as consumers continued to splash out on new clothes.
Both online and store sales growth slowed to 11 per cent in the nine months to October down from 19 per cent in the same period last year.
The popular multinational, which also owns Pull & Bear and Bershka, said earnings before interest, taxes, depreciation, and amortization (EBITDA) increased 13.9 per cent to €7.4bn (£6.3bn).
Despite the weak sales performance, Inditex sounded more optimistic about its current trading, with sales up 14 per cent in the six weeks to 11 December. It also raised its 2023 profit margin outlook.
Victoria Scholar, head of investment, interactive investor said: “This is a mixed set of results from Inditex which has struggled with slower sales driven by unseasonably warm weather.
Inditex has been successfully navigating the pressures from a weak consumer and sluggish economic backdrop, outperforming rival H&M.”
“But despite its intelligent pricing and inventory strategy, it is not immune to these headwinds which are starting to show up in terms of weaker revenues,” she added.
Shares in Inditex are up around 50 per cent so far this year. The stock has added 12 per cent over the past month alone.
The update comes a day after Inditex was forced to pull an advertisement following complaints it was insensitive and contained pictures resembling images from the Israel-Hamas war.
The ad featured a model holding a mannequin wrapped in white, which some viewers said was reminiscent of body bags seen in Gaza.
Zara said the following in a statement posted on Instagram: “Unfortunately, some customers felt offended by these images, which have now been removed, and saw in them something far from what was intended when they were created.”